That makes sense for ruinous losses. If $12K would be a ruinous loss, you’re doing precisely the right thing, if you assume you have to have that exact car.
Having a $5K car would probably be more financially appropriate, but that’s a side topic when considering only “buy this insurance or not”.
Having a $5K car would probably be more financially appropriate, but that’s a side topic when considering only “buy this insurance or not”.